Retrenchments are sometimes inevitable for a company going through a turbulent period. But before making that cut, employers can consider other measures that may be less painful for both sides.
Capitalise on employee attrition and impose a hiring freeze
A hiring freeze, especially for non-critical positions that are vacated, could allow your business to operate at a lower cost while still fulfilling client requirements. You may still need to fill in positions that generate revenue for your business, or where the skills cannot be easily carried out by other staff.
While your staff will by no means be happy that they won’t be getting a raise anytime soon, it is still far better than letting go of them altogether. Provide a time-frame for the freeze to be reviewed and communicate this clearly to the staff so they would at least be aware and hopefully more sympathetic to the financial strains the company is going through.
Let go of contract workers and temp staff
Your contract workers and temp staff will not be pleased, but you have less commitment to these than to regular employees. And most contract workers and temp staff would know that, sadly, they can be dispensed with during a crunch.
Give employees incentives to leave
Offer employees the option of a golden handshake. This may cost the company a significant amount in the short term, but could save said company a lot more in the long term. An exit incentive is far less brutal than a straight lay-off, and would give the employee some time to consider his options for employment elsewhere.
This option could work for your bottomline, but it’s important to consider the fact that you may lose some staff, especially your best employees, who would probably be very employable elsewhere.
Impose shorter work weeks
A four-day work week, with a corresponding pay reduction, could work for some employees, who may enjoy some time off. But again, you may risk losing your best with such a measure.
Impose a temporary salary reduction
Again, you stand to lose your best workers with this measure, but the risk could be significantly reduced if said employees are made aware of when their salaries will be restored.
Schedule unpaid sabbaticals
This should be done on a voluntary basis, and some employees may actually enjoy such a break if they can afford one. However, there must be some form of guarantee that the employee has the option of returning to work once the scheduled break has expired.
Have honest conversations with you staff
Explore alternatives with your staff. They may eventually be happy to accept some of the above measures, or they could also provide suggestions as to how you could save the company loads of money.
For most companies, laying off staff is never the first recourse but the last resort. It is never pleasant for either side, and those who survive such cuts may experience relief but quite often, unhappiness would set in. It is thus very important for employees to understand that tough business decisions have to be made, but even if there is to be some unhappiness, employees would be far less bitter if they were made to understand that such measures were made with the intention of being fair to everyone employed by the company.